Event Contracts & COVID-19: 3 MORE Lessons Learned for Event Hosts!
Heather Reid ARCT MSc, Founder & CEO, Planner Protect Inc.
This article is provided for general information purposes and does not constitute legal advice.
It is hard to believe that a full month has passed since I sat to write my previous article “4 lessons learned so far!” Some of the past days and weeks seemed to have lasted for an eternity and yet the month has flown by! And in that time, so much about our beloved events industry has radically changed. While the 4 lessons learned in the previous article are still relevant – here are 3 more to consider.
Lesson #5: Building in uncertainty will certainly be needed!
In last month’s article, I wrote about negotiating contracts with terms as flexible as possible because we are negotiating and signing contracts “on speculation” right now! Let’s unpack some of the terms that we will want to ensure are “flexible”.
Attendee Headcount: while our live event historically may have attracted hundreds of attendees (as an example), when we host our next live event post-pandemic we will need to consider that a significant portion of our attendees will not be comfortable with travelling, may not have the financial support to travel to and attend our event, and a portion may simply prefer to access any virtual options being provided. So, being conservative in our headcounts will be prudent.
Attrition: even if we were to remain optimistic about event attendance (after all, “revenge attending” is now an identified phenomenon!), it is wise to negotiate for our financial obligations, in terms of guestroom revenue and food & beverage revenue for examples, to be as “risk free” as possible. I am aware of several brands that are currently offering “no attrition” incentives to entice group business – and while these offers may be temporary, having the discussion with our venue partners to minimize our attrition/financial obligations is critical. Our ability to predict future meeting attendance – and our financial responsibilities and ability to perform resulting from that attendance – is pure speculation at this point and we need our contracts to reflect that!
Meeting Space: with the current expectation of maintaining physical distance, it is recommended that we work with our venue partners to create new “physical distanced” set-ups and floorplans before signing a contract to ensure that we are realistic in our minimum/maximum attendance thresholds – which we can then benchmark our financial obligations in the contract such as guestroom block and food & beverage minimums.
Lesson #6: “Duty of Care” is an essential premise that is shared by both event hosts and venues
“Duty of Care” is an obligation to protect meeting attendees from risks such as sickness, safety and health. Taking care of meeting attendees is a multi-layered, multi-faceted, multi-focused responsibility and is once again top of mind for both event hosts and venues. Here are just a few considerations: thermal cameras, hand sanitizer stations, employee wellness standards, employee training, cleaning and disinfection schedules for public spaces, cleaning and disinfection standards of porous and non-porous services, use of protective gear for employees and attendees, food prep and service safety, and on and on. As of this month, numerous venues and brands are starting to publish their own sanitization protocols that speak specifically to COVID-19 concerns. While it is imperative that venues work to instill confidence with event hosts that their facilities are safe, there is also a responsibility of event hosts to further these protocols and guidelines by implementing their own processes and protocols to ensure attendee safety. Ensuring due diligence would suggest that both parties have a robust discussion about “who owns what duty of care responsibility” before any contracts are signed! At minimum, contracts should be drafted to specifically address the requirements of “at the time of signing” existing and known government guidelines for sanitization and safety protocols. We should also be mindful that our current situation is ever-changing (and future situations are yet unknown!), and contracts should include language indicating that if regulatory guidelines tighten or loosen, adherence by the venue would be expected.
Lesson #7: What was an acceptable price or rate before COVID-19 may no longer be relevant
I have had the opportunity in the last two weeks to assist two clients with contract reviews for their “rebooked” association conferences – and one thing that I’ve noted is that the cost of doing business in the venues has remained exactly the same. Costs for guestrooms, meeting space, menus etc. have been simply “cut and pasted”. Now, please know that I am not suggesting that this may not a reasonable rate for that future time (I wish I had a crystal ball!), however, my concern is that we should build protection into our contracts that should the marketplace dictate significantly lower rates at the time of the event, we have the contractual option to renegotiate more reasonable pricing. Take for example – a $280/night room rate in 2020 might have been acceptable, however, if this pandemic is followed by a hard-hitting recession, that $280/night rate may be so high at the time of the event, that attendees will elect to book anywhere else! In this example, both parties have a vested interest in having “bums in beds” and our contracts need to reflect that. Not protecting this possible scenario could create further disappointment for both parties!
In closing, creating balanced contracts – that protect both event hosts and venues – requires strategic thought, contract expertise and considerable effort. While we continue to move through this pandemic and are in a “wait and see” period for the “new world” of live events – it is prudent for us all to ensure that our future event contracts reflect a host of new and necessary nuances, and protect a range of possibilities. After all, we need to move forward despite the uncertainty!
